Look What the Cat Dragged In

Part 91. Andrew Wilkinson (continued).

You can find this week’s TL;DR here.

Key Lessons:

• Diversify if you don’t know what you’re doing.

• Double-down on what’s already working.

• Avoid shiny object syndrome.

• Clear your schedule.

• Delegate.

Shiny object syndrome. Have you heard of it? This occurs when an entrepreneur gets distracted by the next “shiny object”. We flit about like cosmic moths, drawn to every glimmering new idea. Often it’s a trend, or opportunity that sparkles in the vast expanse of the business universe. You know a guy like this. He’s blessed with vision yet cursed with distraction. He will often abandon his main quest for a side quest.

Andrew Wilkinson’s main quest, MetaLab, was crushing it. If there’s such a thing as too much success, no one feels sorry for that. Your business crushes you. Another meeting that could be an email. Another conference call that could be a text message. Another text message that turns into another meeting. If you’re so successful, why is your schedule so full? You’re not successful. You’re busy.

Harken the words of Charlie Munger.

His point? The enlightened investor wields deep understanding and conviction. Spreading bets across a galaxy of mediocre opportunities dilutes greatness. Why scatter your cosmic energy when you can focus it like a laser on a few stellar choices? If you haven’t done your homework, forget about it. But if you grasp the essence of a business, you don’t need to diversify. Pile your resources into those rare, high-confidence winners. It beats hedging against your own brilliance.

Take his Berkshire Hathaway playbook. He and Buffett bet big on a handful of “sure things”—Coca-Cola, American Express, and the like. Rather than diversify into a constellation of random stocks.

To Munger, over-diversification was a crutch. It’s for the timid or uninformed. Diversification is a shield against failure, sure. You limit your upside and your downside. You get reversion to the mean. Picture a symmetrical, bell-shaped curve. Its peak towering at the center of the x-axis, sloping gracefully downward on either side. Mediocrity, in this grand design, is the vast middle—the mean or average, where the curve crests. On a bell curve, this is the most common outcome. It’s the gravitational core where the bulk of the population clusters. The ordinary reigns supreme.

The path not taken by the person with shiny object syndrome is to double-down on what’s already working. Andrew would find his way there, but not without a detour into cat furniture.

Methods of Prosperity newsletter is intended to share ideas and build relationships. To become a billionaire, one must first be conditioned to think like a billionaire. To that agenda, this newsletter studies remarkable people in history who demonstrated what to do (and what not to do). Let me know how I can help you out. For more information about the author, please visit seanallenfenn.com/faq.

Last week on Methods of Prosperity

When there’s a gold rush, sell pickaxes and shovels. He was an internet entrepreneur selling web design to startups. Abandoning the job board, he found clients through strategic networking and cold emails. Andrew positioned his company, MetaLab, as an interface design firm. This placed him in a category of one. For the first time, he had enough money coming in, and it was increasing. That’s when the 2008 financial crisis hit. He was down bad. Andrew faced cash flow challenges. Bankruptcy became a realistic potential outcome. But he learned from these hardships. He became more diligent with his finances. MetaLab survived the downturn, securing high-profile clients like YouTube and Slack. Determined never to be in financial hardship again, he went out and made more money. But it wasn’t enough. He needed to diversify.

Do you know about my livestream podcast? It’s called Hidden Secrets Revealed Live (HSRL), and I record it live on 𝕏 every Wednesday. 

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One of the entrepreneur clichés is to find a problem to solve which is personal to you. Chances are, more people out there have the same problem. What they might not tell you is that there’s a good reason why no one else has made the attempt. For example, it might not be urgent and the numbers don’t work.

Indulge me for a moment. Let me tell you about an idea I tried a few years ago. My friends have kids. They live in Brooklyn. They ended up with a stockpile of baby clothes that their kids grew out of. The problem was that they couldn’t give them away. There’s too much. My friends are eco-conscious and wanted to recycle or upcycle them. That is, sell them. But the secondary marketplace for used baby clothes is fragile at best. Long story short, it’s not a problem that pays enough to break even.

Selling cat furniture online is one of those problems that is next to impossible. It’s not profitable. There’s too much competition from big box pet stores like Petco. Never mind Amazon. Around 2008–2009, Shopify was starting to gain market share. For independent sellers, Shopify fits that market for small e-commerce brands.

Inspired by his cat, Andrew created a Shopify store over the weekend. Named H.J. Mews, it sold designer cat furniture, losing money on every sale. Right away, he was losing $10,000 per month. After 1 year and over $200,000 in losses, he decided it was time to quit the cat furniture business. He would later attempt an online DJ school, a skin care product for an odd skin condition, and a pizza restaurant.

It dawned on him that his main quest was working. It was simple. MetaLab had no physical inventory or expensive overhead. Clients paid a high hourly rate for design work that cost a low hourly rate to fulfill. The difference was profit.

All he needed was a vacation. That was frightening. He was in charge of MetaLab. The idea of going on vacation triggered more anxiety. So when a friend invited him to go backpacking in Europe, Andrew took him up on it. And immediately regretted it. There was someone who could fill in. His friend Mark was a copy writer. They’d met during Andrew’s brief stint at college. He did good work and was reliable.

Andrew put Mark in charge and gave him his European cell number with strict instructions. “Only call in case of emergency.” Mark never called. He signed more clients and improved several processes. It ran smooth without Andrew. It was a machine.

That’s when Andrew’s paradigm changed. “I was Teflon for tasks,” he says. Andrew discovered what he calls “lazy leadership”. That is, you don’t have to do it all. Delegate. Design the machine. Be the owner from above.

The fact is, there’s always someone else who loves what you hate.

Andrew built the machine. It was printing money. Now what?

To be continued…

I like you,

– Sean Allen Fenn